Raja Paints India Private Limited Vs Deputy Commissioner of Income Tax

Parties Involved

Facts Summary

The assessee, Raja Paints India Private Limited, is contesting an ad-hoc addition of Rs.3,05,61,134/- made by the Assessing Officer (AO) on account of Gross Profit for Assessment Year 2017-18. A survey under section 133A was conducted on the assessee, during which an amount of Rs.1 crore was surrendered. The AO increased the Gross Profit (GP) rate to 12% and made the addition, rejecting the GP rate of 2.998% shown by the assessee. The Commissioner of Income Tax (Appeals) concurred with the AO's findings. The assessee argued that the addition was made on an ad-hoc basis without proper verification and that the 2.998% figure was the net profit, not the GP. The assessee relied on previous judicial pronouncements to support its case.…

Legal Issues

• 1. Whether the ad-hoc addition of Rs.3,05,61,134/- made by the AO on account of Gross Profit is valid.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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